Brazilian business and unions blast monetary policy.

[bemildred]

Brazilian business organizations and trade unions bitterly criticized the Central Bank’s monetary policy which last week raised the basic interest rate, Selic, for the sixth consecutive time, to 18,75%, considered the highest in the world.

Businessmen and economists warned that extremely high interest rates threaten the Brazilian economy growth and cautioned about insisting with this instrument to curtail inflation which could end drying up business and consumer confidence.

---

“Government is obsessed with keeping the 5,1% inflation target, but at this rate and since prices will continue to increase because what is needed is a deep administrative reform, the Central Bank will have to take the basic rate to 29%”, blasted Carlos Borges president of the Sao Paulo Commerce Federation.
“The time has come to change the integration of Copom (Central Bank Monetary Council) because it’s punishing production and jobs”, added Mr. Borges.

MercoPress